Monday, April 24, 2017

Politicians don’t listen to the people. It’s one of the most common complaints in any country around the world: the government announces a program that is useless or counterproductive, the affected citizens reject it and explain why it’s a bad idea, but the authorities carry on anyway and waste millions of dollars on a new folly, and the entire process starts all over again. When we point out this reality, one of the first answers we’ll get from a statist is that “the same thing happens in business. Many big companies don’t listen to their customers, either.”

They’re right. Private bureaucracies, like the ones you see in Big Business, can be as obtuse, deaf, and arrogant as their public sector’s counterparts. The difference, however, comes in what happens next. With government programs, a politician can waste billions of dollars without paying a penny out of his own pocket, while its subjects must accept the imposition in order to avoid a fine or an arrest. Conversely, in the world of business, it’s the businessmen themselves who pay for their own arrogance.

Top of the Gaming World

One of the clearest examples of this phenomenon is the authentic tale of two (sim) cities within urban planning video games. Here it is:

The original Sim games had huge followings for 14 years, with member groups of hundreds of thousands.For over two decades, the “Sim City” franchise was the undisputed Queen of urban simulation video games. Since the launching of the first game in 1989, it became a huge sales success, driving Maxis (the studio who developed it and that was many years later acquired by Electronic Arts, “EA”) to the top of the world. Sim City 2000 & Sim City 3000 consolidated the success, and Sim City 4, released in 2003, created such a huge and committed community of “modders” and designers that it remains active 14 years later, with people creating new buildings and modifications daily and sharing them on websites such as Simtropolis, with over 686,000 members, and SimCity Devotion, with more than 100,000 members.

That’s why Maxis simply re-titled the franchise “SimCity.” That name presented a fully tridimensional setting powered by the Glassbox engine, and the gamer community was really excited. However, expectation turned to a bitter disappointment as the studio announced a myriad of other changes: there would be almost no support for modders, there would not be tools to create buildings, the game would be multiplayer only, could not be played offline, and would offer maps of a maximum size of 4 square kilometers (or around the size of a “small” map in SimCity 4).

And Then Chaos

The official forums of the game were filled with critics. Many users dedicated hours of their time to write some very long and very well-crafted comments analyzing why those “features” of the new SimCity were a mistake. The company reacted first with condescension and then with outright arrogance, and kept going with its bad ideas.

You can imagine the result: disaster. After the launch, EA’s servers collapsed and the game engine proved to be an unstable nightmare, leaving many thousands of angry customers in frustration because for the first few weeks they could not even play the game for which they had paid $60. Later they were angry for the small size of the maps and the lack of variety in buildings. Maxis and EA had one of the most talented modding communities at their disposal and they basically threw them out, but they paid for it. A few months after the release of the game, the Maxis studio in Emeryville who developed SimCity closed its doors.

Natural Selection in the Market

Even the largest company can fail if it chooses to ignore the desires of its clients, and even the smallest one can succeed if it listens to them.What happened next? Another company came over, listened to the SimCity gamers’ community, and created a new urban simulation game, including the specific things that we had asked of Maxis and EA for so many years. In August 2014, a small videogame developer headquartered in Finland named Colossal Order announced “Cities Skylines,” stressing that it could be played offline and that it would offer support for the modders beginning on launch day.

The result? Despite Colossal Order (and Paradox, the game’s publisher) lacking the financial strength of a giant like EA, “Cities Skylines” became an overnight success, with more than half a million copies sold in the first week and more than 3.5 million to date. There have been three major expansions (with a fourth one on the way), and a huge fan base has already created more than 100,000 buildings and modifications for the game. The studio made a fortune and now they’re the new undisputed kings of the genre.

The moral of this tale of two cities is that companies can indeed be as arrogant and stubborn as politicians, but, unlike governments, private businesses face the consequences of their mistakes and pay for them with their own money. Even the largest company can fail if it chooses to ignore the desires of its clients, and even the smallest one can succeed if it listens to them. That’s why, in the long run, voluntary interaction within the frame of a free market will always be better than government coercion and central planning. It’s as simple as that.

Gerardo Garibay Camarena is a Mexican writer and political analyst with experience in the private and public sector. He the author of two books – Sin Medias Tintas and López, Carter, Reagan – and a weekly columnist for many online news organizations.